2012 - %3, November

Klein: My experience is that the very rich are open to higher taxes in the context of a deficit deal....But they don't like the idea that their money should be redistributed simply because they have too much of it....And so that's part of the tension: They don't like why Obama is raising their taxes. And they certainly don't like the lack of admiration he's showing while trying to do it. They see it as punishing their success.

Freeland: I completely agree. I think Obama and the economists around him have a very sophisticated understanding of both globalization and the technology revolution and the impact they're having on the world economy and the way they're creating these winner-take-all spirals. The positive scenario, which I think is a bit pollyannaish, is all you need to do is improve the education system and change the skill set and all will be well. And even that takes a lot of investment and a lot of time. But there's actually the possibility that in order to have a healthy middle class, you're going to need to have a more redistributive society, at least for awhile. I think that's something the American super-rich don't think about much. One guy who's a liberal Democratic guy, who has worked in Washington for Democrats, who I quote in my book, he said to me, maybe this is how the world is. Maybe the 1950s were an aberration and the way the economy naturally works is this wide difference in distribution.

I'd add something to this. I think it's quite possible for rich individuals to agree, in the abstract, that things have changed over the past 30 years in a way that's benefited the rich tremendously as a class. But that doesn't mean they agree, in concrete terms, that they themselves have benefited from anything in particular. And they don't like being made to pay a price for something they feel they aren't personally responsible for.

A Wall Street lawyer who makes $500,000 per year probably would have made half that much in 1980. The extra pay is solely due to broad economic and political trends, not because the 2012 lawyer works harder or knows more. That's easy to concede in the abstract. But it's quite another thing to suggest that the 2012 lawyer should therefore pay higher taxes to make up for this. That doesn't feel like fairness, it feels like punishment. And that's how they view it.

Earlier today, President Barack Obama took the battle over the fiscal cliff to Twitter, urging his followers to voice their support for his budget plan with the hashtag #MY2K. The tag refers to the $2,200 that the average American family will save each year if Congress votes to extend the Bush tax cuts for all but the top 2 percent of earners.

Obama's Twitter campaign reflects a push to mobilize his large army of grassroots supporters beyond the electoral campaign. His strategists don't want to repeat the mistakes of four years ago, when the populist energy from his campaign fizzled for lack of any meaningful way for his supporters to stay involved. Vocal support from liberals for the middle-class tax cuts might make it easier for Obama to boost taxes on the rich.

The #MY2K hashtag quickly began trending on Twitter. But waging a policy battle with social media isn't as simple as it might sound. Here's a sample of tweets that use Obama's hashtag:

The origninal tweet:

"Call your members of Congress. Write them an email. Tweet it using the hashtag #My2K." —President Obama

With options running out, the future of Mississippi's only remaining abortion clinic likely depends on a federal judge.

The Jackson Women's Health Organization, represented by the Center for Reproductive Rights (CRR), has filed another motion calling on the court to block enforcement of a new state law that would shut down the clinic for good. Passed last April in a fairly blatant attempt to make Mississippi an "abortion-free" state, the law requires doctors who provide abortions to have official admitting privileges at a local hospital. The doctors at Jackson Women's Health, both of whom travel to Jackson from out of state, have been trying to secure the privileges for months.

Those efforts have proven fruitless. In July, the court allowed the law to go into effect but blocked any penalties from being enforced while the hospital application process played out, and the department of health granted them six months to try to come into compliance. But, at this point, the result of the application process is a "forgone conclusion," according to CRR.

The doctors' applications have been rejected by every hospital they've approached. Two hospitals wouldn't let them apply at all. Five others denied the applications for "administrative" reasons, before even completely reviewing the doctors' qualifications. Their rejection letters cited their policies regarding abortion and "concern about disruption to the hospital's business within the community." The clinic wrote follow-up letters to make sure the hospitals understood that the doctors were only seeking privileges to comply with the new law and wouldn't actually be providing abortions at the hospital, but no dice.

"Anti-choice politicians were very clear that they had one in thing in mind when they passed this law: to shut down Mississippi's only abortion clinic," said CRR's president Nancy Northup in a press release. "It isn't a surprise to anyone that the physicians at the Jackson Women's Health Organization haven't been able to obtain admitting privileges at any local hospital."

Unless the law is blocked, the clinic will be in violation on January 11. If it's forced to close, Mississippi would be the only state in the country without a single abortion clinic, and women would have to travel to surrounding states to end their pregnancies. But the clinic's owner, Diane Derzis, says she's hopeful that the judge will declare the law unconstitutional. "Without him doing so," she warns, "Mississippi has banned abortion."

Susan Rice, thought by many to be Obama's No. 1 pick for secretary of state, holds millions of dollars in investments in Canadian oil companies and banks with stakes in the $7 billion Keystone XL Pipeline, according to a piece out today from OnEarth, a magazine published by the environmental advocacy group Natural Resources Defense Council. As head of the State Department, Rice would have ultimate authority in determining the fate of the pipeline, which would link northern Alberta's remote oil sands fields to Texas' Gulf Coast refineries.

The piece reveals that Rice has significant holdings in more than a dozen Canadian oil companies and banks that would benefit from the growth of the Canadian tar sands industry and the construction of the controversialpipeline. OnEarth's Scott Dodd finds that nearly a third of Rice's personal net worth—estimated in 2009 to be between $23.5 million and $43.5 million—is invested in Canadian oil producers, pipeline operators, and other energy companies, including several with egregious environmental records on both sides of the border. Financial disclosure reports further show that Rice has between $300,000 and $600,000 invested in TransCanada, the company that is seeking the permit from the State Department to build sections of the pipeline from Oklahoma to the Canadian border.

"It's really amazing that they're considering someone for Secretary of State who has millions invested in these companies," Bill McKibben, founder of the activist groups 350.org and Tar Sand Action, which have organized protests against the Keystone XL project, told OnEarth.

The decision on whether to build the pipeline was delayed in 2011 when the State Department ordered a review of alternate routes to avoid cutting through an ecologically sensitive section of Nebraska. This saved Obama the political cost of having to make a decision on the controversial project in an election year. The Keystone XL decision could be one of the first tasks of the new secretary of state in 2013.

To read OnEarth's full story, click here. To see a larger version of the document below, click here.

Bruce Bartlett has a piece in The American Conservative that tells the story of his excommunication from the conservative movement, and it's gotten a lot of attention on the left. I'm already familiar with the outlines of what happened, so I only now got around to reading his story. And it turns out that the most interesting passage has nothing to do Bartlett per se. It's what happened after Ron Suskind published a New York Times piece that quoted some of Bartlett's criticism of George Bush and the GOP:

Interestingly, a couple of days after the Suskind article appeared, I happened to be at a reception for some right-wing organization that many of my think tank friends were also attending. I assumed I would get a lot of grief for my comments in the Suskind article and was surprised when there was none at all.

Finally, I started asking people about it. Not one person had read it or cared in the slightest what the New York Times had to say about anything. They all viewed it as having as much credibility as Pravda and a similar political philosophy as well. Some were indignant that I would even suspect them of reading a left-wing rag such as the New York Times.

I was flabbergasted. Until that moment I had not realized how closed the right-wing mind had become. Even assuming that my friends’ view of the Times’ philosophy was correct, which it most certainly was not, why would they not want to know what their enemy was thinking? This was my first exposure to what has been called "epistemic closure" among conservatives—living in their own bubble where nonsensical ideas circulate with no contradiction.

That's remarkable. Even with the low opinion I have of modern movement conservatives, it never occurred to me that they literally thought of the New York Times as simply a left-wing version of Fox News. Yikes.

What would be the best thing to do with the Bush tax cuts? Letting them expire on December 31 is a bad idea because the economy is still in fragile shape and a big tax increase would probably send the U.S. back into recession. Extending them permanently is a bad idea because we need to raise more revenue in the future and reduce the medium-term deficit. Letting only the high-end tax cuts expire is OK, but it's not optimal either. It doesn't raise enough money in the long term and it feeds the fiction that middle-class taxes will never have to go up.

The best option is to let everything expire, and then pass a new tax cut that phases out over time. The new tax cut might be a reduction in rates equal to the Bush tax cuts, or it might be some other set of reductions. It doesn't matter very much. What does matter is that one-quarter of the cuts should expire in 2014, another quarter in 2015, another in 2016, and another in 2017. This would have a gradual effect on the economy, it would require no further congressional action, it would improve our medium-term deficit problem, it would take effect primarily while the economy is recovering, and it would do no more than eventually return us to the tax levels of the Clinton era. There are more complicated approaches you could think of—tagging the expiration dates to economic benchmarks, for example—but in this case, simpler is better. Just phase out the cut over four years and be done with it. That's easy for people to plan for.

So why won't this happen? Because there's no constituency for it. Republicans won't get behind it because they want permanent tax cuts. Obama won't get behind it because it's effectively a tax increase on the middle class, something he's promised to oppose. Independents might get behind it, but their political influence is approximately zero.

So that's the situation we're in. The best solution is probably the least likely to be enacted. Welcome to Washington.

This year is likely to be the ninth warmest on record, with global temperatures in 2012 cooler than the average for the past decade owing to the effects of La Niña weather patterns early in the year.

The estimates come as governments wrangle over the form of a proposed new global agreement on climate change, that could eventually replace the Kyoto protocol. Nearly 200 countries are meeting in Doha, Qatar, but as yet there are few signs of unity.

So far this year, the current world average global temperature is 14.45° C, which is between one-tenth and a 0.5° C higher than the 1961 to 1990 average.

The World Meteorological Organisation (WHO) used information from three global temperature sets, running from January to October, to make its estimate. But the ranking could change under further analysis, and final data will not be ready until next March.

Peter Stott, head of climate monitoring and attribution at the UK's Met Office, whose data contributed to the WHO estimate, said: "Although the first decade of the 21st century was the warmest on record, warming has not been as rapid since 2000 as over the longer period since the 1970s. This variability in global temperatures is not unusual, with several periods lasting a decade or more with little or no warming since the instrumental record began."

Although climate change sceptics may seize on the data, it does not change the long-term warming trend. Nine of the 10 hottest years on record have occurred since 2001, according to the Met Office. As well as the La Niña variation, there may have been other weather effects at work.

Stott said: "We are investigating why the temperature rise at the surface has slowed in recent years, including how ocean heat content changes and the effects of aerosols from atmospheric pollution may have influenced global climate."

There have been multiple examples of unusual or extreme weather this year, including superstorm Sandy, which was one of the strongest storms on record to hit New York. Before that there was a serious drought over much of the US's grain-growing region, which has pushed up global food prices. There has been drought in parts of Russia, as well as disruptions to the Indian monsoon, and floods in parts of Europe, including a record wet spring and early summer in the UK.

The UK's Met Office was more cautious in its estimate of this year's temperatures than the WMO, using a dataset compiled jointly with the University of East Anglia to estimate that 2012 was likely to be between the 4th and 14th warmest year in a record dating back to 1850.

That dataset, known as HadCRUT4, includes data from land stations, higher-latitude stations with coverage of the Arctic, and sea surface temperature data.

The Environmental Protection Agency announced on Wednesday that it has temporarily barred BP and all its affiliates from new government contracts. This is significant news, as it comes at the heels of BP's settlement with the Department of Justice over criminal charges related to the Deepwater Horizon oil disaster. One of the criticisms of the settlement was that it did not include penalties for the company beyond the $4.5 billion fine.

The EPA's announcement was a bit of a surprise. The agency said in a press release that the prohibition on new contracts is in response to BP's "lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response." That included neglect and misconduct that led to the death of 11 rig workers, and lying to Congress and shareholders about the extent of the damage from the spill.

The company will be barred from obtaining new contracts "until the company can provide sufficient evidence to EPA demonstrating that it meets Federal business standards." The company will, however, maintain its current contracts with the government. The Wall Street Journal reported during the 2010 spill that BP was "the single biggest supplier of fuel to the Department of Defense, with Pentagon contracts worth $2.2 billion a year."

Scott Amey, general counsel for the Project On Government Oversight, called the announcement "surprising but welcome" in a statement. "This is exactly the strong step the government should take to protect federal agencies, safeguard taxpayers, and establish expectations for responsible contractor behavior," said Amey. "BP had years to improve its business ethics and is paying the price for its inaction."

"The President has said many times that the American people are demanding action," White House Communications Director Dan Pfeiffer said in a statement to The Huffington Post. "They want to see progress, not partisan delay games. That hasn't changed, and the President supports Majority Leader Reid's efforts to reform the filibuster process."

This is important for more than PR reasons. Although there's some disagreement about how the filibuster rules can be changed, most observers agree that it requires a ruling from the president of the Senate, aka Joe Biden. And Biden isn't going to support filibuster reform unless his boss supports it too.

So while this is no surprise, it's a necessary piece of the puzzle. Harry Reid still needs to get 51 members of the Democratic Caucus to agree to a plan, but if he does there's nothing standing in the way of implementing it.

If people want to waste their time on this, I don't have a huge objection to the idea of somewhat higher taxes and somewhat skimpier benefits, but I think it's pretty silly. Recall that 75 years ago was 1937. Any minute spent in 1937 worrying about actuarial projections about 2012 as opposed to, say, Adolf Hitler or the Great Depression would have been a minute wasted.

....The deal worth trying to make on Social Security would be a deal that found a way to take the program outside the somewhat fantastical realm of trust fund accounting. Assessing the "affordability" of a social insurance scheme in terms of the state of its associated accounting instruments rather than the capacity of the economy to carry the load is very misleading. The actually policy question at any given time is what share of national resources should go to raising the living standards of the elderly.

I don't want to make this blog into Social Security Central, especially since I'm not super committed to finding a deal right this second. Still, this deserves some pushback. First, we aren't talking about a 75-year horizon. The latest projection from the trustees shows the Social Security trust fund running out of money in 2033. That's only 20 years away, considerably closer than Matt's own retirement, which I assume he's already planning for. At that point, Social Security benefits will suddenly drop 25% unless we do something about it.

Now, this projection might be wrong. The Great Recession has done a lot of damage to the trust fund projections, but we won't be in a recession forever. And these projections have been inaccurate before. However, although these are all arguments I've made myself in the past, I no longer believe I was right about them. The truth is that 20 years isn't a long time, and it's unlikely that the projections are off by more than a decade at most. This is a problem that's worth addressing.

Second, getting outside the realm of trust fund accounting is precisely what a deal would be about. Regardless of what you think about the trust fund, it's only going to last another couple of decades. After that, Social Security will have to be properly financed on a cash basis. This means that tax income in any given year needs to match benefit payments in that year. That's what this entire issue is about.

So: a Social Security deal would allow the program to operate without the trust fund, and it would keep the program solvent beyond the current trust fund exhaustion date of 2033. It would also probably make it solvent for the rest of the century, but that's just icing on the cake. This is a problem that's worth spending time on.